PET BUSINESS RETAIL STATISTICS

Pet Age Magazine reports the following pet business retail statistics for their annual Retailer Report which came out in January of 2008 and covers the years 2005 and 2006. Here were some of the highlights gathered from the 249 retailers who responded:

• Number of boutique pet stores represented in the survey were down by half to 9% from 18% a year ago.
• Gift specialty category contributed only 3% to gross dollar volume down from 7% in 2005
• Sales growth for gifts and specialty items slowed with only 43% of retailers seeing year-over-year gains vs. 57% in 2005.

According to Pet Age, "These numbers could indicate that interest in high-end boutique items has reached it's peak --- or that customers are responding to general economic woes by going back to basics and foregoing purchases that aren't necessary for the animal's health and well-being."

Other hightlights...

MORE STORES SELLING PETS

• Number of stores carrying reptiles and amphibians jumped 15%.

• Live animal sales added 13% to gross volume sales in 2006 vs. 10% in 2005.

• Live animals remained in the number 3 spot in terms of its average contribution to dollar volume per store.

• Average margins for live animals declined from 124% in 2004 to 118% in 2005 to 112% in 2006.

FOOD & SUPPLY CATEGORIES REBOUND EXCEPT FOR BIRDS

• 64% of retailers saw sales of fish food and aquarium supplies increase vs. 58% in 2005.

• Average transaction by aquarium owners was up significantly from $28.49 in 2005 to $39.60 in 2006.

• Reptile food and supplies increased as a percentage of gross dollar volume from 3% in 2005 to 5% in 2006.

• 63% of respondents reported increases in small animal supplies and food vs. 57% in 2005

• Only 48% reported sales gains in bird supplies in 2006 vs. 60% in 2005.

  Inventory turnover for bird supplies fell to 9.6 in 2006 from 12.8 in 2005.

SERVICES GROW STRONGER

• Ancillary services like grooming and home delivery represented 12% of dollar volume per store in 2006 vs. 9% in 2005.

• Profit margins on services rose to 68% in 2006 vs. 65% in 2005.

• Adding services may have peaked with only 31% of retailers planning to add ancillary services in 2006 vs. 34% in 2005.

RETAILERS PROCEEDING WITH CAUTION

• Average pet retailer reported average gross dollar volume dropped 31% to $761,243 from $1.1 million in 2006 but up 21% from 2004 ($628,041).

• Independent pet stores that sell companion animals grossed an average of $686,128 in 2006 vs. $883,527 in 2005.

• Independent pet stores selling supplies only grossed $559,168 vs. $641,826 in 2005.

SUMMARY

According to the Pet Age annual survey: "The boutique craze may be peaking as consumers—and pet retailers—get back to basics. Despite the fact that they (retailers) turned merchandise overall much less frequently (8.8 times in 2006 vs. 14.6 times in 2005) most pet stores seem to be in good shape. 63% of survey respondents reported dollar volume increses in 2006 and 62% reported increases in net profits. Even better, 20% of respondents saw dollar volumes increase 25% or more and 15% saw net profits increase 25% or more. By comparison, 68% of retailers reported increased dollar volume in 2005 and 62% reported increased net profits.

The number of retailers experiencing volume or profit decreases remained fairly constant. One in five (21%) saw gross dollar volume decreases in 2006 vs. 24% in 2005 and 28% saw net profits decreases vs. 29% in 2005.

OTHER HIGHLIGHTS

• The median amount that each pet store spent on advertising in 2006 was $3,845.

• Nearly one in four pet retailers said they plan to throw in the towel within the next two years.

• Dog supplies and accessories were the number one category accounting for 18% of sales in 2006 (down from 22% in 2005)

• Fastest growing product category in 2005 and 2006 is dog food.

• Average transaction per customer: $38.34 in 2006, down from $38.37 in 2005.

• Disturbing trend: Number of retailers selling pure-breed puppies increased to 23% in 2006 from 17% in 2005.

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